One of the most exciting aspects of venture investing is when we see a company that plays a role in creating a consumer phenomenon. DraftKings is just that sort of company. Founded only a year ago, DraftKings is a leader in the emerging space of real-time fantasy sports, awarding over $50 million in prizes this year in its first full year of operations.
For years, the conventional wisdom around fantasy sports leagues was that they represented a huge, growing, engaged audience, but without a clear path to monetization. Enter real-time, daily fantasy sports. Jason Robins, the founder and CEO of Draft Kings had the vision to remove the friction associated with fantasy sports, and provide a huge incentive to play. By changing the games to daily events rather than season-long events, Jason and the team at Draft Kings made fantasy sports more real-time and accessible, a valuable companion to the live sports viewing experience. Rather than joining one league for a whole season, players can now play multiple distinct games every day. Furthermore, by offering cash prizes to the winners of these daily fantasy games, Draft Kings solved the monetization challenge associated with fantasy sports.
The results have been nothing short of amazing. User growth and retention are both impressive. Over 75% of players that played a game in 2012 are active in 2013. Even more impressive, just since August of this year, Draft Kings has tripled its customer base with year-over-year revenue growth of over 10x.
We are excited to join Jason and his team at DraftKings to help redefine the fantasy sports market.